How a Trump Presidency Could Affect Policy
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– Ryan Fitzwater, Publisher
If Donald Trump were to win the presidency again, the impact on the markets would likely be shaped by his well-established policy preferences.
Here’s how his return to office could affect 7 key market sectors:
1. Tax Cuts
Trump has consistently favored lower taxes, particularly for corporations and high-income individuals. A return to his tax-cutting agenda would likely boost corporate profits and market sentiment, potentially leading to a surge in stock prices, especially for large-cap companies and sectors like tech, finance, and energy.
Action Plan: Go long on technology, long speculative stocks, and crypto
2. Deregulation
Trump’s approach to deregulation in industries such as finance, energy, and healthcare could further increase corporate profits by reducing compliance costs. This would likely benefit stocks in those sectors, especially oil and gas companies, banks, and large industrial firms.
Action Plan: Go long on chemical companies
3. Trade Policy
Trump’s protectionist trade policies, including tariffs and a more confrontational stance toward China, could reintroduce uncertainty in global markets. While this may boost domestic manufacturing and certain industries, it could also disrupt global supply chains, impact companies reliant on foreign trade, and lead to volatility in industries like agriculture, tech, and manufacturing.
Action Plan: Go short on China, long on Mexico and Canada
4. Energy
A Trump presidency would likely benefit traditional energy sectors like oil and gas. He has consistently promoted U.S. energy independence and rolled back environmental regulations. Renewable energy stocks might face headwinds under this scenario as policy support could shift away from climate initiatives.
Impact: Neutral, we are already producing records amount of energy
5. Federal Spending and Infrastructure
Trump has previously supported large infrastructure projects. If he pushes forward with infrastructure investments, it could boost sectors such as construction, materials, and industrials, though this would likely be paired with continued pressure to limit social spending.
Action Plan: Go long on steel and prison stocks
6. Interest Rates and Inflation
Trump has criticized the Federal Reserve for maintaining higher interest rates in the past and may put pressure on the Fed to keep rates low to stimulate growth. This could be bullish for equities in the short term but could also lead to inflationary concerns, affecting bond markets and potentially increasing market volatility.
Action Plan: Go long on the US Dollar as interest rates will likely move higher over time but also go long on gold in event of massive deficit spending
7. Healthcare and Pharma
Trump has supported deregulating the healthcare sector and lowering drug prices. While this might benefit consumers, pharmaceutical and healthcare stocks could face pressures from pricing reforms and a more competitive landscape.
Impact: Neutral
YOUR ACTION PLAN
Overall, a Trump win would likely be viewed as market-friendly in the short term due to his pro-business policies, tax cuts, and deregulation. However, potential trade wars, inflation concerns, and geopolitical uncertainties might create long-term risks and volatility in specific sectors.
Leading up to the election, we’ve already traded several winners on these sectors in The War Room. One of was on digital currency miner Marathon Digital Holdings (MARA), which we closed two winners on, one for a 30% gain in 13 days and another for a 35% gain in 9 days.
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